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Why some fashion stores like Penneys and TK Maxx resist selling online

By Fora Staff Saturday 28 Apr 2018, 6:30 PM Apr 22nd 2018, 6:01 AM 29,652 Views 13 Comments WITH IRISH CONSUMERS spending €5 billion online every year, you’d think that every clothing store would be desperate to get a piece of the action. However, while most large chains have rolled out online equivalents of their brick-and-mortar presence, a handful of the industry’s biggest names – like Penneys and TK Maxx – remain staunchly offline in Ireland. Ex-Debenhams Ireland general manager Linda Ward, who owns a consultancy firm called Retail Renewal, says there’s a simple reason why clothing stores might resist e-commerce: online and offline are two “completely different” business models. “Bricks and mortar shops have a shop front and the stock is located in the store. Obviously that’s quite high-cost, particularly at the moment when retail rents are predicted to increase 6%,” she says. “Then you’ve got the online-only retailer who uses a website for their shop front and they use a warehouse to locate their stock, which are both low-cost items.” In other words, for a major retailer to move into the online space, they’d have to compete with purely online players like Asos and Boohoo.com, which have lower costs and have built their entire supply chain around e-commerce. Ward says it’s important for retailers to remember that many brick-and-mortar stores that have delved into e-commerce have “ended up doing neither thing really well”. It’s distracted their attention away from their core activity … The online retailers have set themselves up as e-commerce from day one. Establishing a web store requires a significant amount of investment, says Owen McFeely, director of retail and consumer practice at PwC.

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